Are you preparing to purchase a home? If you’re like most buyers, you’ll require financing—which means you need to find a lender. While many home hunters go straight to their banks for a mortgage, it often pays to shop around. Interest rates, financial products, and incentives can vary from one institution to the next. Weighing your options can help ensure that you secure the best financing that’s available to you.
If you’re about to start the process of obtaining a mortgage, try our top five tips for finding the right lender…
1) Get your credit in order
A financial past checkered by late bill payments and other issues can cause problems when it comes time to apply for a mortgage. Worse still, if you’ve ever been an unknowing victim of identity theft, your report could contain errors that damage your chances of obtaining financing. To start the process off on the right foot, be aware of your credit score and history—and take the steps required to address your current standing if need be. You can request your report from one of the country’s two credit bureaus (Equifax Canada and TransUnion Canada).
2) Know your options
There are several types of lending institutions for mortgage seekers to choose from (including traditional banks, credit unions, and private lenders). That said, most home buyers start the process by approaching either a bank or a mortgage broker. There are potential advantages and drawbacks associated with each of these options. One of the biggest differences is that your bank can only provide you with access to their products and services, while brokers will look at many different lenders and present you with your best options. On the other hand, your bank knows your financial history inside and out—and they’re well positioned to help you plan your future carefully.
3) Do your homework
If you’re thinking of working with a particular lender or broker, it’s a good idea to learn as much as you can about their reputation. Before making a commitment, check out their website and online marketing materials—and ensure that what you read aligns with your needs. Don’t forget to read online reviews, which can provide greater insight into what your potential experience as a customer might be like. This process is especially important if you’re working with an alternative lender. Whatever you do, don’t forget to read the fine print in your mortgage contract carefully!
4) Ask questions
When you’re shopping around, be sure to pose the important questions to each lender you speak with. Asking about fees is crucial. Many costs—such as processing fees and those related to appraisals and inspections—can catch borrowers by surprise, so addressing them upfront is always a good idea. Every lender should also provide you with a loan estimate. In addition to finances, be sure to ask about turnaround times for pre-approval and closing. Be aware that the process of obtaining a loan can sometimes hold up a home purchase, so it’s best to firm up your timelines as much as possible.
5) Consider a recommendation
Of course, one of the best ways to discover truly helpful services is by asking people you trust. Try tapping your personal networks to find someone who’s had a great experience with a local lender. You can use both social media and good old-fashioned word of mouth to ensure that family, friends, and acquaintances all know you’re on the lookout for a helpful professional. Your real estate agent is also in a great position to offer a recommendation. They should know the local lending landscape—and which lenders perform best.
Looking to learn more about the home-buying process? From finding the right lender to making an appealing offer, we can answer your questions. Get in touch to start a conversation today!
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